Also, if you pick a 529, check who administers it. I know Connecticut and some other states use TIAA-CREF and they allow contributions in the form of mutual funds or principal plus income annuity. This way you have a guarantee of your principal and get some money on top of it. There are many different options out there to fit all situations and risk tolerances.
I personally would open a Fidelity 529 and use their index mutual funds. I just happen to like Fidelity better but Vanguard has similar offerings at the same expense ratio.
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